AMZN: A head and shoulders forms on the hourly chart!

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With NVDA lowering guidance today and partially blaming a weakness in data centers, we see AMZN down 2% in sympathy. This is not surprising given that AWS is the most massive data center in the world. This price action perfectly forms the right shoulder of a H&S pattern on the hourly chart.

As illustrated above, this very classic pattern comes after AMZN failed to break out above its 200-day MA last week. A break of the neckline at $1612 measures down to $1512 for a 100 point sell-off.

It should be noted that AMZN reports earnings on Thursday January 31st after the close so risk mitigation should be used. It is possible given all of the earnings (and the Fed this week) that we see this H&S play out before they report!

Short AMZN on a break of the neckline at $1612
Target $1515
Stop: $1645
Trade active
Trade closed: stop reached: Stopped out
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